I don’t trust pensions

[Orangepolentacake]

I’m in my mid-30s and, for the first time, in a decent position to properly save for the future, pay into a pension, invest.

I also have some medical conditions, which means it’s possible I won’t live to see mid-70s, if that.

I know pensions come with tax and employer matching benefits but, hear me out:

I don’t trust pensions partly because the goal posts keep changing. Minimum access age for pensions is currently 55. This will soon increase to 57. It could keep increasing and increasing until it matches state pension age. What’s to say it won’t? What is certain is the average person won’t have much of a say in this.
And state pension age could be almost 80 by the time I reach the current retirement age of 67.

then there’s the matter of inheritance. I can nominate a beneficiary but, depending on how I choose to access my pension, the beneficiary won’t have access in case of my death. Who knows what perceived priorities I’ll have at an unknown age in the future and/or minor mistakes with drastic consequences I’ll make. The goalposts can just change along with access age and all my savings are then lost into some ether and my family isn’t able to access them. I don’t think the latter is that unlikely, given ageing population and need to fund longer lives with long term conditions etc

AIBU? What is the best and safest way to save for the future?

Something like this https://www.hl.co.uk/pensions/junior-sipp/junior-sipp-calculator ?

As @SpringBunnies said, You need to be in charge of your own financial affairs and not blame others or ignore them.

YANBU. They don't pay out like they used to, and give you the quality of life you have been used to, and they haven't done for about 20-25 years now.

Me and DH have no pension except the state one to come, and the workplace pensions we have been forced to take part in for the past 10 years. What's the point? We will only be penalised if we have 'too much money' in our retirement, and not get any help, as we will be expected it to fund it ourselves with our pensions... That's if they make any money - which they probably won't.

We have had the mindset to live for now, and spend our money whilst we are young and fit enough to enjoy it. The Government can do the decent thing and look after us when we retire in a decade or so. We have both worked 40+ years, and have paid enough taxes, so we are owed financial support in our retirement.

Like fuck were we ever going to pay multiple 100s a month out of our income over the decades, just to get fuck-all help coz we have 'too much money...' OR see fuck-all return because the pensions tanked.

I get that, and I’m being very rough and ready I know. I could do it all properly but the important bit is that I think you mean they get to 600k at current values, not in real terms, so eroded by inflation.

that’s not saying it’s not a great thing to do, it is. Very sensible.

@Oneborneverydecade.
Absolutely you can.

Sipps!!

Self invested personal pension.

I keep meaning to open one for the dc.

One is a teen but definitely worth doing but as pp said if from birth even better.

Google amount to put in before leaving it.
With small regular contribution they could have a fortune by 57 ( obviously that won't be same age by time I dc retire).

I dream that my dp had done that for me. Would have been so amazing to hwvr that to look forward too.

Investing for dc now for pensions is also effortless.

I didn’t think that sounded right, you’d have to have a great annuity rate to get 30k from it taking into account investment performance on a really large sum. 🤨

If you contribute 100/month until they are 18 and then contribute nothing at all, due to the beauty of compound interest x time in the markets, that pension pot will be around £1m. We do this for my

We can't save for pension, uni & house deposit for each dc so we are prioritising deposit & uni.

Op dh last pension was with a work scheme.
He took it out and moved it into his own set up sipp that's totally under his control.

He chooses the investment and does it himself ( he researched, chose about 5/§6 different index funds and leaves it to do their thing.

No middle man at all just the platform he uses which is hargreve and Lansdowne but he wants to change to vanguard.

I also opened up a personal sipp with a small inheritance.

I put some into an isa as well because I don't want all my money stuck unaccessible.

That's what I love about sipp. It's DIY and no one interfering.

Thanks all.

I agree that missing out on the employer contribution seems foolish. Diversification within these safer options - contribution up to employer match included - seem to be a good way forward.

I have read up on the ISAs and different options but need to look into SIPPs

don’t know much about investments (just the basics!) but planning on changing that

You really need to get educated. It is a very tax efficient way of saving for your retirement years if you want a level of comfort more that the government pension will give you.
Aviva, Royal London all offer a standard set of investment funds that spread risk. Your company will have one. You can transfer it to another one when you leave and put them all together.

I own all my pensions, which means the money is mine and it goes to who I specify (and outside inheritance tax thresholds). I could in theory retire now at 58 but will probably top it up and try and get 2 more years working.

I have taken some of my 25% out but will look to take the rest when I retire.
Do you want more money then the basic gov pension, if you do you need to find a way of saving. I get 7.5% off my employer, I will not give that up.

I have been diligent in keeping tabs of all my pensions, but even I had 1 I missed. I did the gov trace thing about and found a teeny one of £4500 - as they say every little help!

Exactly what I do. I've only worked in the UK for about 10 years. I've changed jobs twice and both times I take my pension with me and put it into my Vanguard SIPP. Do all my investing myself and pay minimal fees.

@3BSHKATS

Other child investments yielded far far more than though if they invested into decent stocks and shares, even 500

@Hermione101... It's a great feeling isn't it and no shady snake oil middle men trying to flog you stuff.

@Orangepolentacake.

Read about jack bogle and vanguard.

Meaningful money.

Mr money moustache and fire.

I'm too late to fire and think its too extreme however.. It's got basic investing principles down.

I would really check out who you invest with. Aviva have been dreadful with paying mine out. I'm thinking I may have to go to the regulator or ombudsman because they don't respond to letters or emails at all. The phone number takes at least 30 minutes to get through to someone. Who can't do anything to help except send them another email. They even ignore their own complaints form.

Swap £1 for £12 sounds like a defined benefit pension (mostly public sector; certainly it's 1:12 for the NHS pension). They work very differently from a typical private pension.

Most people who distrust pensions seem to invest in property instead (assuming they have anything to invest).

Property can be risky, too.

That’s awful

Thanks @Conductpolicy

yep I used to use this to find pensions for our older clients. I used to write to them.

@3BSHKATS I didn't know you could start a pension for your kids. I won't be able to put much but I'm sure at this stage every little helps. Thanks.

Avivia isn't a straightforward investment platform like what other people are suggesting with a sipp

Have you tried the pension tracing service? Here www.gov.uk/find-pension-contact-details

There is work on a dashboard which all pensions will show up in but it's delayed at the moment.

If I can chime in on the Junior Sipp thing…

Investing in a low-cost S&P500 tracker can be expected to return 9.5% per annum on average like it has for the past 60 years. So more than the previously quoted 8%.

However, yes that does not account for inflation, if we assume an average inflation rate of say 3.5% that leaves 6% growth in real terms.

BOE targets 2% inflation but we all know that basket of goods is fudged and inflation varies quite wildly sometimes…

A £30k pot invested getting 6% on top of inflation for 32 years will result in a pot valued around £200k in real terms (which could be about £600k nominal terms).

That £30k pension will be worth about the same as £10k today. Not too shabby but not as excessive as it looks without applying inflation.

Thing is, the rate of return you get has a massive impact. If you only get 4% then that pot will be more like £100k not £200k. 8% will mean about £350k.

I still think Junior Sipps are a great idea and will do starting one for DC soon. I plan on maximising it - so £2.88k per annum - I’m concerned Labour will target pensions as a source of government income (by making them liable to inheritance tax) so plan on moving pension funds from me to DC. I’ll pay 20% tax taking money out, but DC will gain 25% with tax relief when it goes into their pension so a net zero sum.

Land is a finite resource so unavoidably will be sought after and as population increases people will have to pay a premium, same goes for other assets, for example metals to make computer components, in the future these components will make the price of technological equipment unattainable for many, same goes for water, gold, pretty much every natural resource.

@PrettyMaybug

YANBU. They don't pay out like they used to, and give you the quality of life you have been used to, and they haven't done for about 20-25 years now.

A lot of that is Gordon Brown's pension raid, stopping the "advance corporation tax" that pensions used to be able to claim on the dividends they receive on their investments. That left a massive hole in pension scheme growth.